As Eagle Arts Academy stiffed its landlord and struggled to pay its teachers this year, the charter school managed to find cash to cover a more unusual arrangement – paying its own executive director for the right to use its name.
Since June, the financially struggling Wellington charter school has paid at least $42,000 to director Gregory Blount’s company for the right to call itself Eagle Arts Academy and use an eagle logo, website and data-processing system that the company owns, school records reviewed by The Palm Beach Post show.
The extraordinary payments to Blount’s company continued even as the school was forced to take out short-term loans to make payroll. Last month, it temporarily withheld teachers’ paychecks for the first time, saying it was out of cash.
Blount’s company, Element Management Group, has billed the school even as Blount earns a $95,000 annual salary as the school’s top administrator, a conflict that the school district says violates Eagle Arts’ charter.
The payments continued at least through February, as the school’s bank accounts dried up and rent payments stopped.
As the school’s top administrator, records show Blount convinced the school’s board of directors last summer to support the payments to his newly formed company, although it’s unclear whether the board ever formally approved a contract.
Earlier this month, the school’s two principals resigned after learning that Blount made another payment to Element in the weeks before withholding paychecks from the school’s staff.
Charter school experts called the school’s payments to Blount’s company troubling and said they violated the spirit of Florida’s ethics law. That law prohibits charter school board members, but not necessarily administrators, from selling goods and services to their own schools.
“I have never heard anything like that in my entire life,” said John Legg, a former state senator and the founder of three charter school campuses in Pasco County. “That is highly unethical, and I would question the legality of it. If you’re under salary, you cannot receive any other compensation from the school.”
‘Potential for corruption’
In a brief interview this month, Blount defended his company’s licensing deal, saying that it is modeled on an arrangement that a large national charter school chain makes with member schools. He said that when he arranged the deal, he had planned to step down as the school’s leader.
“My plan was to run a management company,” he said.
But he remained at the school’s helm and continues to double-bill it as both a contractor and its executive director. His $95,000 salary is higher than that of many of the school district’s principals, but he said that he is the “lowest-paid executive director in Palm Beach County.”
While some prominent charter school management companies charge licensing fees to client schools, those agreements are generally part of a larger series of payments negotiated in exchange for managing the school, said Jim Pegg, director of the county school district’s charter school department.
“It is somewhat common with bigger organizations,” he said. “It’s not common with smaller schools like this.”
Though nothing stops a charter school from using state money to license a name or logo, experts said paying the school’s own leader for those privileges creates a conflict of interest.
“There is a potential for corruption in this arrangement, and I think there needs to be some additional scrutiny of the laws that regulate these charter schools to address that potential for corruption,” said Ben Wilcox, research director for Integrity Florida, a Tallahassee-based government watchdog group.
Jeffrey Wood, an attorney with the Tripp Scott law firm in Fort Lauderdale who frequently advises charter schools, said a charter school contracting with its own director’s company may not be illegal, but “clearly it sets up a conflict depending on how the agreements are worded.”
A school in such a situation might hesitate to fire an incompetent director to avoid changing its name, he said. Conversely, a school might feel compelled to pay for an undesirable name in order to appease a high-performing director.
“What if you are happy with the executive director, but the school wants to change its name? What are the consequences there?” he said. “It’s just common sense not to have a tying relationship between two separate contracts.”
A draft contract and board meeting notes reviewed by The Post indicate that Blount’s company is billing the school for the use of the trademarked name “Eagle Arts Academy,” an eagle logo, the website domain EagleArtsAcademy.com, a license to use images of Walt Disney, and use of a “student information system and enrollment management system.”
Name trademarked after school opened
The school opened for business four years ago with its current name. But Blount, who founded the school, moved quickly to take ownership of the name afterward.
In December 2014, Blount applied for a trademark of the name through one of his companies, federal trademark records show. The trademark was registered 1½ years later, in March 2016.
His company also claimed licensing rights to the school’s eagle logo and website domain name, according to school records.
Around the time that the federal government granted the trademark of the school’s name, Blount began pushing the school to pay his company, Sound Tree Entertainment, a licensing fee, records show.
It’s not clear whether those payments were ever made. But in June 2017, Blount informed board members that he was transferring the licensing rights to a newly formed company, Element.
Even though there’s no indication that the school’s board formally approved a contract with Element, payments to the company began on June 19, according to financial records provided by the school district.
The first four monthly payments were for just shy of $6,000 each. In October, the payments fell to about $3,600 for four months, then rose to slightly above $3,800 for the last recorded payment on Feb. 23.
A draft of an earlier version of the contract suggests the payments were based on the school’s enrollment.
It’s not clear whether payments to Element continued into March, when the school failed to deliver teachers their paychecks. Eagle Arts didn’t submit March’s financial records to the school district, and the school did not respond this past week to questions from The Post or a public records request for the contract.
Blount has said that he devised the school’s “Eagle Arts” name, the “eagle,” a reference to his attainment of the Eagle Scout rank as a Boy Scout and “arts,” a reference to the school’s arts-based curriculum.
The school’s logo depicts an eagle soaring beneath a star, its talons clasping a banner displaying the words, “I Will Rise On Eagles Wings.” It is ubiquitous at the school — etched on doors, prominent on the website and displayed on students’ uniforms.
The Element payments are not the first time Blount has drawn scrutiny for enriching himself via school contracts.
Blount has been criticized for steering more than $150,000 of school money into his own companies since the school opened in 2014. In 2016, he was forced to repay $46,000 after The Post revealed that the school gave him the money in the guise of a loan repayment.
District: ‘We need to call him out’
The school district said that the payments to Element may violate Eagle Arts’ charter with the school board, which bars the school’s leader from owning or operating a private management company or education service provider that does business with the school.
But the school has repeatedly refused to turn over a copy of a contract to school district administrators, leaving officials unable to review the arrangement, said Pegg of the district’s charter school office.
“He’s never given us the opportunity to review what this alleged agreement actually provides,” Pegg said. “When we realized he had this agreement going, we went to the superintendent and said we need to call him out on this.”
Tim Quinn, Eagle’s Arts’ board chairman when the payments began, resigned this month in protest of Blount’s management of the school. He did not respond to a request for comment.
Philip DiComo, a North Palm Beach attorney who advises the school on legal matters, did not respond to questions about the payments.
Former Palm Beach County Schools Superintendent Robert Avossa cited the payments to Blount’s company in his recommendation last month that the school board close Eagle Arts in June. Board members voted unanimously to close it unless the school can fix its financial problems.
While highly unusual, attorney Woods said the payments to Element may not be illegal.
Though state law prohibits members of a charter school’s board from selling goods or services to the school, the law is less clear about the schools’ executive directors, Woods said.
Florida’s ethics law prohibits “purchasing agents” and “officers” at public agencies from striking up business arrangements with those agencies. But whether charter schools are considered public agencies is less certain.
Charters are considered public schools, but since they are operated by nonprofit corporations, their administrators and staff are generally private employees.
“This is an evolving area of the law,” Woods said. “I think it is still an open question but trending towards charter schools being treated as public agencies.”
Renatta Espinoza, principal of the Academy for Positive Learning, a Lake Worth charter school, said she and other charter school leaders have grown frustrated watching Eagle Arts founder.
She said the school’s questionable financial practices taint the entire industry, which is frequently beset by complaints that charter schools misspend money.
“It’s difficult for me as a charter school principal and founder to see this in the newspaper,” she said. “As the principal, you can’t open a fictitious company and put money into that company.”